Boeing-Embraer partnership receives shareholder approval

SAO PAULO and CHICAGO, Feb. 26, 2019 /PRNewswire/
— The proposed strategic partnership between Boeing [NYSE: BA] and
Embraer [B3: EMBR3, NYSE: ERJ] was approved today by Embraer’s
shareholders during an Extraordinary General Shareholders’ Meeting held
at the company’s headquarters in Brazil.

At the special meeting, 96.8
percent of all valid votes cast were in favor of the transaction, with
participation of approximately 67 percent of all outstanding shares.
Shareholders approved the proposal that will establish a joint venture
made up of the commercial aircraft and services operations of Embraer.
Boeing will hold an 80 percent ownership stake in the new company, and
Embraer will hold the remaining 20 percent.

The transaction values 100 percent of Embraer’s commercial aircraft operations at $5.26 billion, and contemplates a value of $4.2 billion for Boeing’s 80 percent ownership stake in the joint venture.

Embraer shareholders also agreed
to a joint venture to promote and develop new markets for the
multi-mission medium airlift KC-390. Under the terms of this proposed
partnership, Embraer will own a 51 percent stake in the joint venture,
with Boeing owning the remaining 49 percent.

“This groundbreaking partnership
will position both companies to deliver a stronger value proposition
for our customers and other stakeholders and create more opportunities
for our employees,” said Paulo Cesar de Souza e Silva,
President and CEO of Embraer. “Our agreement will create mutual benefits
and boost the competitiveness of both Embraer and Boeing.”

“Approval by Embraer’s
shareholders is an important step forward as we make progress on
bringing together our two great aerospace companies. This strategic
global partnership will build on Boeing’s and Embraer’s long history of
collaboration, benefit our customers and accelerate our future growth,”
said Dennis Muilenburg, Boeing chairman, president and chief executive officer.

Embraer’s defense and executive
jet business and services operations associated with those products
would remain as a standalone publically-traded company. A series of
support agreements focused on supply chain, engineering and facilities
would ensure mutual benefits and enhanced competitiveness between
Boeing, the joint venture and Embraer.

“Our shareholders have
recognized the benefits of partnering with Boeing in commercial aviation
and the promotion of the multi-mission airlift KC-390, as well as
understanding the opportunities that exist in the executive aviation and
defense business,” said Nelson Salgado, Embraer Executive Vice President of Finance and Investor Relations.

“People across Boeing and
Embraer share a passion for innovation, a commitment to excellence, and a
deep sense of pride in their products and their teams – these joint
ventures will strengthen those attributes as we build an exciting future
together,” said Greg Smith, Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy.

Boeing and Embraer announced in December 2018 that they had approved the terms for the joint ventures and the Brazilian government gave its approval in January 2019.
Shortly thereafter, Embraer’s board of directors ratified its support
for the deal and definitive transaction documents were signed. The
closing of the transaction is now subject to obtaining regulatory
approvals and the satisfaction of other customary closing conditions,
which Boeing and Embraer hope to achieve by the end of 2019.

Embraer will continue to operate the commercial aviation business and the KC-390 program independently until the closing of the transaction.

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